Three Key Ways Wellness Testing Benefits Companies

Takeaway:
Healthcare cost reduction, increases in employee loyalty, and increases in productivity are all benefits of a wellness testing program.

Corporate wellness testing refers to a wide range of wellness testing programs offered by companies to their employees. Some of the core benefits such programs offer companies include increasing employee productivity, decreasing turnover, and reducing healthcare costs.

The majority of corporate wellness testing programs offer incentives to encourage participation. Most also contribute toward employee healthcare costs in exchange for having regular checkups. Some programs also incentivize positive lifestyle changes by making their contributions to healthcare premiums conditional on continued progress. For example, a program might make a company premium contribution depend upon an employee reaching a target resting heart rate, a blood glucose level of Y, or a cotinine level that proves the patient in question has quit smoking.

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Corporate wellness testing programs come in many different shapes and sizes. While some provide nothing more than an annual physical examination at the employee’s place of work, others involve a battery of tests offsite every two weeks.

While the frequency and reward structures of wellness testing programs vary, most provide a full suite of tests for employees. These can include Lipid panels, Blood glucose measurements (A1C testing), BMI assessments, body fat percentage testing, waist circumference measurements, tests for Thyroid Stimulating Hormone, cholesterol, Prostate-Specific Antigens, cotinine tests to evaluate nicotine intake, and more. However, most employees only receive a fraction of these tests and test planning is usually handled by health professionals working in the program. A typical program provides a broad initial screening and a customized follow up that includes a focused panel of indicators designed for the patient in question.

Here are three of the most important ways that wellness testing benefits companies.

Reducing Healthcare Costs

Wellness testing programs are a compelling demonstration of the old adage that an ounce of prevention is worth a pound of cure.

In general, the earlier health conditions are discovered, the more easily (and less expensively) they can be treated. For example, while the progression of type 2 diabetes can lead to serious deterioration in quality of life, the disease can often be reversed through dietary changes and exercise if it is detected early on.

Although there is substantial variance in the nature of the wellness testing that companies provide, they tend to include health risk assessments, standard blood panels, and tests for resting heart rate, blood pressure, and cholesterol levels.

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Supplying employees with information about their health on a regular basis empowers them to make positive changes to their lifestyles. Many companies have been able to strengthen this effect by providing rewards that are calculated relative to changes in the metrics underlying employees’ health. Especially in larger companies, these rewards can prove sizeable. Health-related payments of $1000 per year are by no means uncommon.

The combination of wellness testing and broader wellness programs yield extraordinary results for employers’ investment. For example, Johnson & Johnson estimates that its wellness programs have saved the company over $250 million in healthcare costs. Between 2002 and 2008, their return on investment was $2.71 for every dollar put into their program.

Encouraging Loyalty

Healthcare costs are among the most significant expenses in many households. A full 46% of Americans find paying their healthcare bills a hardship, and 28% have been contacted by a collection agency regarding healthcare bills. In this context, many employees perceive great value in additional healthcare testing and support provided as benefits and paid for by the employer. In turn, this has a substantial impact in terms of reducing employee turnover. Turnover reduction is a huge cost savings to employers as some studies have found that every time an employee must be replaced the average costs are equivalent to 6 to 9 months salary of the employee being replaced. That means an employer is effectively paying nearly double for an employee in their first year of employment.

Moreover, while it might sound trite to say so, employee wellness testing helps employees to feel that they are valued, thus decreasing turnover and increasing employee productivity. This should not be underestimated as a benefit.

Increased loyalty is even more pronounced in companies that have comprehensive employee wellness programs. A study by Towers Watson and the National Business Group on Health found that companies with employee wellness programs have voluntary turnover rates 6% lower than those that do not.

Increasing Productivity

Employees that are in better health are more productive. Although peer-reviewed studies focus on the impact of broader wellness programs on productivity rather than that of wellness testing alone, the literature is clear that these programs cause a clear increase in productivity. This stems primarily from decreases in depression, stress, anxiety and absenteeism.

The cost of absenteeism is much higher than most employers would assume. In fact, some studies but the total cost of absenteeism in the United States at $84 billion in lost productivity with costs reaching $3,600 per year for every hourly worker. That's an additional $1.73 per hour in costs for every hourly worker, not an insignificant sum when calculating wages and costs.

Likewise, presenteeism is a huge drain on productivity and it isn't just workers playing on the Internet. It is estimated that presenteeism accounts for 75% of productivity losses and it (along with some other indirect healthcare costs) combines with absenteeism costs to create up to a $344 billion loss to the United States economy each year.

Most employers are very positive about the benefits of wellness testing. Ultimately however, the proof is in the pudding. According to the same study conducted by Fidelity Investments and the National Business Group on Health, 93% of employers planned to either expand or maintain their current wellness testing program over the next three to five years.

Given the extraordinary benefits employee wellness testing yields, perhaps we should be struck not by the speed of adoption in large companies but by the fact that some companies have yet to implement these programs.